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FINDING  THE 
FACTS 


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GIFT  or 


http://vV\IM:ait;niV6;o'fg/ddtai1S/findin^ 


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FINDING  THE 
FACTS 


Traffic  Department 

LEHIGH  AND  NEW  ENGLAND 
H      RAILROAD  COMPANY 

BETHLEHEM,  PA. 


COPYRIGHT,  1922 

LEHIGH  AND  NEW  ENGLAND 

RAILROAD  COMPANY 

BETHLEHEM 


Gift 


FINDING  THE  FACTS 


*' Business  is  warfare.  It  is  a  hard,  constant  fight 
to  the  finish.  The  moment  a  contestant  enters  the 
field  of  industry  or  commerce,  he  is  challenged  by 
a  host  of.  competitors.  All  his  movements  are  dis- 
puted and  opposed  by  those  already  in  possession 
of  the  field.  He  must  fight  to  live.  He  must 
conquer  to  succeed.'' 

— ^Walter  H.  Cottingham. 

TO  BE  forewarned  Is  to  be  forearmed. 
Having  advance  knowledge  is  hav- 
ing a  battle  half  won.  The  old 
method  of  ascertaining  costs  was  to  discover 
them  after  work  was  completed.  The  new 
way  is  to  ascertain  them  before  work  is  begun. 
A  factory  manager  once  turned  out  a 
first  lot  of  a  special  type  of  machine  at  a 
labor  cost  of  ten  thousand  dollars  each.  An 
industrial  specialist  investigated  the  opera- 
tions and  put  through  another  lot  at  a  cost 
of  five  thousand  dollars  each,  an  economy  of 
^200,000  on  the  entire  job. 


0^  4r%  r\C^  4   i\ 


LEHIGH   AND   NEW    ENGLAND    RAILROAD    CO. 


After  many  years  of  haphazard  group- 
ing and  arrangement  of  activities  we  find 
business  merging  into  a  major  profession, 
sub-divided  into  a  multitude  of  minor  pro- 
fessions. Each  of  these  minor  professions, 
such  as  accounting,  advertising,  credit,  man- 
agement and  salesmanship  has  become  a 
highly  specialized  science.  Other  major  pro- 
fessions, particularly  engineering,  have  fol- 
lowed the  same  trend  of  specialization.  A 
century  ago  a  man  in  any  branch  of  engi- 
neering was  identified  simply  as  an  engineer. 
Fifty  years  ago  he  was  a  civil,  mechanical  or 
electrical  engineer,  while  today,  these  latter 
terms  give  only  a  vague  idea  of  his  qualifica- 
tions or  his  occupation. 

Specialization  finds  its  way  into  all  indus- 
tries and  professions,  sub-dividing  single  occu- 
pations into  many,  and  confining  the 
individual  more  and  more  to  specializing  in 
one  line. 

Today  the  industrial  specialist  is  uni- 
versally accepted  and  acknowledged  to  be 
a  necessary  adjunct  to  every  large  industry. 
These  specialists  have  widened  their  scope 
of  operations  and  usefulness,  increased  their 

[4] 


FINDING   THE    FACTS 


knowledge  of  special  subjects  and  become 
more  valuable  to  industry  every  year. 

Today  they  not  only  lay  out  and  plan  the 
building  of  an  industrial  plant  so  that  the 
movement  of  a  manufactured  article  will 
travel  in  the  most  direct  line  from  start  to 
finish,  thereby  saving  time,  labor  and  money, 
but  their  usefulness  extends  even  to  the 
organizing,  financing  and  launching  of  an 
enterprise.  One  very  important  phase  of 
their  work  constitutes  the  detailed  and 
exhaustive  investigations  necessary  to 
logically  decide  upon  the  best  location  in 
which  any  particular  industry  will  thrive. 

Just  as  the  modern  chemist  predicts 
reactions  and  obtains  them;  just  as  the 
mining  engineer  assays  a  situation  and 
determines  the  value  of  the  ore,  so  the 
industrial  specialist  assays  a  situation  and 
predicts  with  surprising  accuracy  what  the 
cost  and  production  will  be.  He  plans  with 
the  same  certainty  of  results  that  the  naval 
engineer  plans  a  Mauretania,  the  bridge 
engineer  a  Brooklyn  bridge,  the  civil  engineer 
a  Simplon  tunnel,  the  modern  architect  a 
Woolworth  building. 

[5] 


THE  LOCATION  SPECIALIST 


"Place  on  my  tombstone  this  epitaph:  *Here  lies 
a  man  who  knew  enough  to  keep  around  him  men 
who  were  cleverer  than  himself/  " 

— Andrew  Carnegie. 


PERHAPS  the  most  important  sub- 
division in  the  industrial  specialist 
field  that  has  been  developed  in  the 
last  decade  or  so  has  been  that  of  the  location 
specialist.  More  and  more  manufacturers 
are  coming  to  realize  that  the  location  of  their 
plant  directly  affects  the  profits  of  the  busi- 
ness. Raw  materials,  transportation,  labor, 
power  and  markets  are  the  primary  factors 
to  be  analyzed,  while  several  hundred  second- 
ary factors  must  also  be  considered,  any  one 
of  which  may  assume  primary  importance  in 
regard  to  a  particular  industry. 

The  specialist  in  location  must  be  excep- 
tionally well  versed  in  the  fundamentals 
and   practical   experience   of  business.     He 

[6] 


FINDING   THE    FACTS 


must  have  accurate  knowledge  concerning 
all  the  different  characteristics  of  every  sec- 
tion of  the  country.  His  knowledge  of  fac- 
tory operation  must  also  be  extensive,  while 
the  question  of  markets  is  one  that  he  must 
understand  in  its  most  intimate  details. 

Many  of  the  larger  corporations  that  are 
continually  branching  out  in  new  lines  and 
extending  established  businesses,  find  it  prof- 
itable to  maintain  a  permanent  staff  of 
location  specialists^  paying  the  members  of 
these  staffs  large  fees  and  salaries.  These 
location  staffs  conduct  extensive  investi- 
gations, going  into  minute  details  in  their 
quest  lor  j acts  before  any  move  is  made  by 
the  principals. 

The  large,  successful  organizations  main- 
taining them  know  that  the  data  obtained 
and  the  decisions  resulting  therefrom  have 
paid  them  many  times  over  in  increased 
profits  and  larger  production.  No  more  are 
they  building  plants  by  guess-work,  rule-of- 
thumb,  or  chance.  The  location  of  a  plant 
in  a  town  where  the  leaders  of  the  organi- 
zation may  be  residing  is  now  looked  upon  as 
a  pretty  expensive  convenience.    The  scien- 


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LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO. 

tific  selection  of  the  section  of  the  country 
in  which  a  particular  industry  will  have  the 
most  advantages  is  now  recognized  as  the 
most  profitable  way. 

HOW  ONE  SPECIALIST  WORKS 

Some  years  ago  an  important  implement 
manufacturing  company  decided  to  locate 
in  a  distant  and  unfamiliar  farming  section. 
What  the  ruling  factor  in  such  a  choice  might 
be,  none  of  the  officials  knew. 

A  specialist  on  industrial  sites  was  given 
the  problem. 

To  the  four  plants  of  the  concern  the  speci- 
alist sent  blanks  for  the  tabulation  of  con- 
ditions, rates  and  costs  at  each  plant.  On 
a  master  sheet  he  arranged  columns  and 
headings  for  comparison  of  present  and 
prospective  locations,  point  by  point. 

He  sent  forward  other  blanks  to  the  man- 
agers of  sales  in  the  district  in  which  loca- 
tion was  desired,  requesting  reports  on  land 
developments,  present  and  probable,  acreage 
and  crops,  implements  likely  to  be  bought 
within  two  years,  and  finally,  factory  sites  or 
plants  on  the  market. 

[8] 


FINDING    THE    FACTS 


He  was  constantly  on  the  lookout  for 
manufacturers  whose  plants  he  could  inspect, 
and  with  whom  he  could  consult  on  trans- 
portation, fuel,  ore,  building  costs,  equip- 
ment, etc.  The  situation  was  complex  and 
he  tabulated  a  few  choice  locations  in  great 
detail.  Moreover,  the  sales  reports  and 
forecasts  that  reached  him  suggested  a  change 
in  demand  so  he  directed  an  investigation 
into  the  value  of  tractors  on  big  ranches. 
Personally  he  inspected  supply  mills  and 
mines,  and  plants  similar  to  the  one  which 
he  wished  to  locate,  in  three  great  districts, 
hundreds  of  miles  apart. 

One  of  these  plants  was  located  near  the 
central  metropolis  of  the  new  section.  Gen- 
eral conditions  and  costs  for  that  locality, 
and  what  details  he  learned,  marked  it 
favorably.  As  he  went  through  the  plant  he 
mentally  checked  off  the  advantages  it  offered. 
Upon  meeting  his  principal  soon  afterwards 
he  recommended  acquiring  it  at  once. 

"What — buy  an  engine  plant  to  make  farm 
implements.^''  the  noted  manufacturer 
exclaimed.  *'Why  not?"  was  the  reply. 
**Not  only  do  we  get  foundries  and  machine 

[  9  ] 


LEHIGH   AND   NEW    ENGLAND    RAILROAD    CO. 


shops  and  a  force  all  easily  fitted  to  our  work, 
but  within  five  years  this  territory  will  be 
demanding  farm  engines  in  quantity."  The 
specialist  drew  out  his  reports  and  established 
his  point. 

'*But  what  about  metal — your  ore  beds 
are  five  hundred  miles  south/*  said  the  manu- 
facturer. **You  would  not  give  that  section 
a  second  thought  after  touring  it/'  said  the 
specialist.  He  then  told  how  he  had  found 
success  in  manufacturing  within  the  south- 
ern district  to  be  a  rare  exception  because 
certain  classes  of  its  inhabitants  were  quar- 
relsome, making  a  labor  supply  unwilling  to 
co-operate  and  constantly  embroiled  with  its 
employers  over  some  grievances.  On  a  slip 
of  paper  he  added  the  triple  freighting  costs, 
made  up  of  incoming  ore  and  fuel,  and  out- 
going product,  for  both  centers.  The  chief 
markets  far  to  the  north  and  west  just  bal- 
anced the  southern  ore  supply,  making  the 
central  location  equally  efficient  with  the 
other.  Going  still  further,  he  revealed  an 
emergency  source  he  had  found  for  iron  and 
steel,  conveniently  located  for  the  central 
location. 

[10] 


FINDING   THE    FACTS 


On  this  evidence  the  plant  was  purchased. 
Within  three  years  it  was  operating  at  a  good 
profit,  having  been  extended  in  the  form  of 
an  H,  with  one-half  devoted  to  implements 
and  the  other  half  to  farm  engines. 

This  indicates  not  only  the  detail  work 
which  must  be  attended  to  in  selecting  a 
wise  location,  but  also  the  knowledge  of 
fundamental  policies,  future  opportunities, 
and  dangers  which  the  locator  can  **buy  out 
of"  or  "into." 

One  manufacturer  puts  it  this  way:  *'I 
locate  a  plant  as  I  assemble  an  engine — at 
what  I  call  the  center  of  total  convenience." 
And,  usually,  one  essential  of  production  or 
merchandising,  as  labor  or  local  market,  is 
so  fixed  that  its  weight  in  regard  to  costs  and 
profits  draw  everything  else  to  it. 

ESTABLISHING  A  CANADIAN  BRANCH 

Some  years  ago  a  manufacturer  of  plows 
decided  to  open  a  pioneer  Canadian  branch. 
Being  fairly  well-informed  on  the  requisites 
of  factory  sites  he  decided  not  to  call  in  a 
specialist,  but  to  handle  the  problem  him- 
self. 

In] 


LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO. 

He  worked  out  advantages  in  cost,  trans- 
portation, material  and  labor  in  great  detail. 
First  he  tabulated  and  studied  sales  reports 
and  forecasts  from  the  Canadian  territory 
and  picked  out  nine  cities  ranging  in  popu- 
lation from  four  thousand  to  ninety  thousand, 
well  situated  and  connected  to  ship  to  the 
heart  of  the  agricultural  territory.  He  then 
analyzed  conditions  in  his  present  manufactur- 
ing plants  according  to  a  careful  outline. 
From  this  he  developed  a  chart  including  all 
the  additional  considerations  which  seemed 
important  in  the  present  case;  such  as  land 
offered  free,  available  sites  adjacent  thereto, 
bonus,  cost  of  building  and  probable  total 
cost  to  manufacture. 

After  correspondence  with  the  authori- 
ties of  the  various  cities  he  made  appoint- 
ments to  go  over  the  territory  personally. 
Going  to  the  heads  of  traffic  by  rail  and 
water  he  found  what  transportation  and 
terms  he  could  get  on  raw  material,  supplies 
and  the  finished  product  for  each  site.  He 
noted  what  towns  had  already  made  favor- 
able records  as  distributing  centers.  He 
figured  his  trucking  costs  and  the  amount  of 

[I2l 


FINDING   THE    FACTS 


freight  so  that  he  knew  what  terms  he  could 
make  with  an  individual  railroad  line  which 
would  have  no  competition  for  his  trade, 
and  of  what  importance  switch  tracks,  belt 
lines  and  traffic  alliances  offered  by  certain 
cities  would  be  towards  better  freight  service 
and  to  save  teaming  with  its  daily  delays  at 
crowded  freight  depots. 

He  sought  quick  delivery  of  equipment  in 
emergencies,  accessibility  of  factory  from  the 
Canadian  sales  office  and  the  advertising 
value  of  the  site  among  out-of-town  cus- 
tomers who  would  wish  to  go  through  the 
plant.  In  connection  with  transportation 
he  compared  coal,  gas,  water,  electricity 
for  power  and  even  considered  the  disposal 
of  ashes. 

Working  with  street  railways,  telephone 
companies  and  commercial  clubs  he  detected 
the  trend  of  growth  of  the  most  promising 
towns,  got  at  location  values  and  roughed 
out  cost  of  delivery  by  horse  and  motor 
truck. 

He  investigated  the  local  labor  supply, 
going  to  employers,  foremen  and  other  officials. 
He  considered  the  possible  surroundings  of 


13] 


LEHIGH   AND    NEW    ENGLAND    RAILROAD   CO. 


his  employees :  housing,  costof  living,  schools, 
parks,  ''walking  distances"  and  car  service. 

He  put  a  black  mark  against  sites  where 
the  available  space  was  small  and  a  build- 
ing several  stories  high  would  be  necessary. 
Where  the  ground  was  cheap  he  calculated 
the  advantages  of  a  plant  not  built  entirely 
of  concrete  and  steel,  but  more  flexible  for 
remodeling  or  sale.  He  tabulated  insurance 
conditions  as  regards  sound  buildings,  spec- 
ified distances  between,  sprinkler  systems 
and  water  supply. 

In  two  of  the  most  attractive  cities  he 
planned  for  instant  action.  In  a  single  day 
the  preferred  site  was  taken  over  and  con- 
tracts closed  covering  land,  shipping  facili- 
ties, water,  light  and  power  service,  rates, 
freedom  from  taxes  for  a  certain  period, 
street  car  service  and  various  labor  and 
housing  arrangements. 

But  for  three  years  this  plant  showed  no 
profits  whatever. 

Had  this  manufacturer  engaged  the  serv- 
ices of  a  location  specialist,  one  of  the  first 
things  the  specialist  would  have  entered 
into  would  have  been  an  extensive  analysis  of 

[14I 


FINDING   THE    FACTS 


the  market.  Although  American  farmers 
were  flocking  into  Canada  and  everyone 
foretold  a  tremendous  expansion,  the  analy- 
sis of  the  specialist  would  have  disclosed  the 
fact  that  the  new  farmers  were  all  bringing 
their  implements  with  them,  and  with  the 
knowledge  of  the  time  required  by  the  farm- 
ers of  Alberta  to  bring  their  total  raw  land 
under  the  plow,  this  plant  might  have  been 
built  more  wisely  and  showed  profits  from 
the  start. 

"Four  facts  are  worth  a  hundred  hunches." 

— Ernest  S.  Bradford. 


[15] 


ANALYSIS  OF  A  SITE 


"Initiative,  perserverance,  courage  and  all  other 
attributes  of  business  success  are  only  secondary  to 
the  attribute  of  thoroughness, 
"Whether  or  not  a  policy  or  plan  is  ^good  busi- 
ness* depends  upon  certain  factors  that  are  funda- 
mental— upon  specific  data. 

"Unless    these    data    are   based  upon  Jact^    the 
foundation   of  all  enterprise  is  insecure,  and  the 
higher  the  edifice,  the  more  liable  it  is  to  topple. 
^^Thoroughness   is    the    most   important    business 
principle  I  have  learned." 

John  Hays  Hammond 

Capitalist  and  engineer,  whose  technical 
training  and  remarkable  command  of  detail 
has  enabled  him  to  obtain  as  high  as  $100,- 
000.00  for  an  opinion. 


A.  W.  Shaw,  Editor  of  ""^ System^'  says  that 
the  first  step  in  analyzing  an  industrial 
site  is  to  resolve  the  main  problem  into  its 
constituent  problems.  Thus  the  suitability 
of  any  factory  site  breaks  up  into  a  number 
of  unit  questions :    How  near  and  how  access- 


[i6] 


FINDING   THE    FACTS 


ible  is  the  market  for  your  product?  What 
are  the  transportation  facilities  and  rates, 
and  the  chances  of  alternative  service  during 
car  shortages?  What  sources  of  materials 
are  at  hand?  Under  what  control?  What 
will  materials  cost,  compared  with  costs  at 
competing  points?  Is  there  an  adequate  sup- 
ply of  labor  of  the  kind  required,  at  the 
prices  you  can  pay?  Are  local  conditions 
such  as  will  help  or  hinder  in  the  securing, 
retaining  and  handling  of  the  working  force? 
Will  any  financial  advantages  accrue  from 
location  at  this  particular  point,  either  in 
the  saving  of  capital  invested  or  the  securing 
of  outside  money  needed?  What  will  an 
adequate  and  satisfactory  site  cost? 

Will  the  type  of  construction  best  suited 
to  the  present  and  future  requirements  of 
the  business  comply  with  the  physical  and 
legal  conditions?  Will  the  necessary  out- 
lay for  buildings  be  greater  or  less  than  at 
other  available  locations?  Will  the  tax  rate 
be  lower  or  higher?  Will  the  situation  of  the 
factory  add  to  the  fire  hazard  and  the  insur- 
ance rate?  Will  lighting  conditions  be  satis- 
factory?   The  water  supply  adequate?    The 


[17] 


LEHIGH   AND   NEW    ENGLAND    RAILROAD   CO. 

drainage  and  other  facilities  for  disposal  of 
wastes  sufficient? 

Are  the  surroundings  likely  to  affect  manu- 
facturing processes  or  the  comfort  or  health 
of  employees  at  work?  Will  the  plant  be 
within  walking  distance  or  at  least  not  diffi- 
cult to  reach  from  the  homes  of  employees? 
Will  the  location  contribute  to  selling  or 
advertising  value  of  the  product?  Will  it 
involve  any  excessive  legal  limitations  on  the 
activities  of  the  business? 

Unusual  circumstances  or  local  conditions 
may  give  special  importance  to  certain  fac- 
tors in  these  problems.  The  drastic  pro- 
visions of  employers'  liability  laws  in  New 
York  State,  for  instance,  have  trebled  the 
former  cost  of  casualty  insurance.  Com- 
pared with  a  New  Jersey  or  Connecticut 
site,  the  other  advantages  of  which  were 
approximately  equal,  a  New  York  location 
at  present  might  be  a  poor  investment.  Yet 
in  the  long  run  it  might  provide  a  higher 
type  of  laboring  force. 

The  splitting  up  of  the  main  problem  and 
the  listing  of  the  factors  in  this  way  not 
only  prevents  the  giving  of  undue  weight  to 

[i8  1 


FINDING   THE    FACTS 


any  single  factor,  but  also  reduces  the  analy- 
sis of  competing  sites  to  something  like  a 
mathematical  operation  in  which  the  advan- 
tages and  disadvantages  of  each  are  compared 
with  those  of  the  others. 

ADVANTAGES  OF  INDUSTRIAL  CENTERS 

Certain  general  advantages  reside  in  a 
location  where  other  factories  in  the  same 
line,  or  in  allied  lines  are  concentrated. 
Examples  of  this  is  the  shoe  making  in  Lynn, 
Brockton  and  St.  Louis;  flour  milling  at 
Minneapolis  and  St.  Paul;  and  cotton  manu- 
facturing at  Fall  River  and  New  Bedford.  In 
such  centers,  each  individual  industry,  because 
of  the  importance  of  its  group,  commands 
resources  and  service,  and  profits  by  various 
external  economies  which  the  isolated  estab- 
lishment is  likely  to  miss. 

At  Detroit,  for  instance,  where  the  pro- 
duction of  motor  cars  is  carried  on  exten- 
sively, subsidiary  factories  have  multiplied 
and  now  supply  economically  and  without 
delay  the  special  machinery  and  tools,  the 
specialized  parts,  materials,  accessories  and 
supplies  which  the  parent  industry  requires. 

[19] 


LEHIGH   AND    NEW    ENGLAND    RAILROAD   CO. 

The  magnitude  of  the  market  open  for  these 
specialized  products  tempts  initiative  and 
ingenuity  to  undertake  detail  manufacturing 
tasks  which  the  maker  of  motor  cars  prefers 
not  to  assume  himself,  and  thus  brings  about 
a  co-operative  effort  profitable  to  everybody. 

For  like  reasons  the  purchasing  conditions 
are  more  favorable  at  the  focus  of  an 
industry.  Prices  are  closer,  quality  of  deliv- 
eries themselves  are  more  apt  to  be  on  sched- 
ule. Bankers,  too,  have  studied  the  under- 
lying conditions  more  intensively  and  the 
sound  enterprise  is  more  easily  financed. 
Public  opinion  is  usually  more  favorable  to 
the  basic  community  industry  in  which  a 
large  number  of  citizens  are  interested. 
And,  finally,  where  many  minds  are  directed 
upon  the  same  technical  problems  and  there 
is  interchange  of  information,  advances  in 
production  practice  are  more  frequent  and 
more  quickly  shared. 

Where  the  factories  gather,  also,  labor  con- 
gregates. Mechanics  of  the  highest  skill  or 
specialized  training  avoid  the  isolated  plant 
for  definite  reasons.  If  a  dull  selling  season 
brings  about  a  shut-down  or  half-time  pro- 

[20] 


FINDING   THE    FACTS 


duction,  the  chance  of  employment  else- 
where is  small,  while  a  disagreement  with  a 
foreman  nearly  always  means  removal  to 
some  other  city.  So  general  is  this  feeling 
against  the  factory  at  a  distance  from  the 
greater  labor  markets  that  even  the  most 
stable  of  businesses  when  situated  thus,  find 
it  hard  to  induce  skilled  labor  to  join  their 
forces. 

Unskilled  labor — no  less  a  necessity  of 
large-scale  production — has  a  similar  tend- 
ency to  concentrate  in  the  big  communities, 
particularly  since  so  many  of  our  pick  and 
shovel  men  have  been  recruited  from  south- 
ern and  eastern  Europe.  As  a  result  of 
this  common  drift  on  the  part  of  both  skilled 
and  unskilled,  our  cities  have  become  huge 
labor  markets  from  which  any  number  of 
extra  workers  of  well  nigh  any  class  can  be 
drawn  when  needed. 

These  are  all  general  advantages,  how- 
ever, and  should  not  be  emphasized  to  the 
exclusion  of  possible  special  benefits  which, 
in  a  particular  case,  might  balance  or  out- 
weigh them.  Nearness  to  supplies  of  raw 
materials  and  cheap  labor,  for  instance,  have 


[21] 


LEHIGH   AND   NEW    ENGLAND    RAILROAD   CO. 

made  it  possible  for  southern  cotton  mills  to 
compete  favorably  with  New  England  estab- 
lishments, especially  on  the  coarser  fabrics. 
This,  despite  New  England's  better  trans- 
portation, lower  freight  rates,  cheaper  power, 
highly  organized  markets  and  notable  con- 
centration of  the  industry  with  its  attendant 
advantages.  It  must  also  be  taken  into 
account  that  in  industrial  centers,  skilled  and 
common  labor  are  both  likely  to  carry  organ- 
ized effort  to  limit  production  and  enforce 
relatively  high  wage  scales  much  further  than 
in  communities  where  class  consciousness  has 
not  been  fostered. 

LOCATING  IN  THE  MIDDLE  WEST 

A  TYPICAL  problem  of  the  location  special- 
ist was  the  analysis  of  several  sites  for  a  drain 
tile  factory  in  the  middle  west  some  years 
ago.  The  specialist  made  nearness  to  market 
the  first  consideration,  though  the  other 
salient  factors  were  not  overlooked. 

The  product  would  be  bulky  and  of  low 
value  relative  to  weight;  the  plant  with 
the  shortest  haul  would  enjoy  a  real  selling 
advantage  in  its  lower  freight  rates.     The 

[22] 


FINDING   THE    FACTS 


plant  was  located,  therefore,  near  the  center 
of  a  district  where  the  level  lands  were  low 
and  drain  tile  in  constant  demand.  The 
extra  cost  and  added  risk  in  processing  the 
inferior  raw  materials  found  there,  were 
accepted  for  the  sake  of  the  advantages  in 
transportation.  As  the  customer  paid  the 
freight,  the  saving  appealed  directly  to  his 
pocket.  The  new  company  did  not  need  to 
cut  prices  and  thus  provoke  disparagement 
of  its  product,  while  the  difference  in  rates 
emphasized  its  character  as  a  *'home'' 
industry. 

There  was  a  plentiful  supply  of  native 
labor,  with  sufficient  intelligence  to  master 
quickly  all  but  the  most  technical  processes 
of  manufacture.  When  the  balance  was 
struck,  the  new  location  scored  on  four 
principal  counts — transportation,  two  points; 
labor,  one  point;  finance,  one  point  (a  free 
site  was  offered  and  additional  deposits  of 
raw  materials  could  be  purchased  cheaply); 
advertising  and  selling,  one-half  point. 

Against  these,  three  disadvantages 
appeared,  banking  facilities  were  limited, 
subtracting    one-half    point;    material    was 


[23 


LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO. 

inferior,  one-half  point;  sources  of  fuel  were 
distant,  increasing  the  cost  and  deducting 
another  one-half  point.  The  net  result  was 
a  count  of  four  and  one-half  points  in  favor 
of  the  new  location  against  two  points 
disfavorable. 

The  problem  of  plant  location,  however, 
does  not  stop  with  the  selection  of  a  partic- 
ular city.  The  actual  placing  of  the  factory 
to  satisfy  and  make  the  most  of  local  and 
internal  conditions  is  a  matter  which  can  be 
settled  only  by  the  same  process  of  careful 
analysis  and  weighing  of  the  essential  factors. 
Where  in  the  general  district,  such  as  the 
traffic  zone  surrounding  a  large  city,  is  the 
plant  to  be  built  ?  What  section  of  the  chosen 
town  is  the  most  suitable? 

Here  are  found  many  of  the  factors  which 
are  important  in  determining  the  main  prob- 
lems: transportation  (direct  railroad  connec- 
tions), power  (no  neighborhood  restrictions 
on  its  production),  labor  (accessibility  from 
residence  districts  and  freedom  from  objec- 
tionable conditions),  advertising  and  selling 
values,  and  so  on.  The  physical  character- 
istics   of    competing    sites    must    also    be 

[24I 


FINDING   THE   FACTS 


examined.  Can  suitable  foundations,  for 
example,  be  secured  at  average  cost  ?  What  is 
the  slope  of  the  ground?  Can  this  slope  be 
used  in  planning  the  layout  of  the  buildings  ? 
How  does  it  affect  drainage  or  the  water 
supply?  Will  the  excavation  furnish  materi- 
als for  construction,  as  gravel  or  sand  in  a 
building  of  reinforced  concrete? 

In  the  local  placing  of  the  drain  tile  plant, 
transportation  again  governed.  The  shale 
beds  and  free  site  lay  some  distance  from 
the  village,  alongside  one  railroad  but  a 
mile  and  a  half  from  its  junction  with 
another  road.  To  build  here  would  require 
no  investment  in  a  site,  while  the  material 
could  be  delivered  to  the  machines  at  mini- 
mum cost.  The  drawback  would  be  the  lack 
of  connections  with  the  other  railroad. 
Many  shipments  which  might  secure  com- 
petitive service  and  rates  if  both  carriers  were 
accessible  would  get  only  routine  attention 
at  the  maximum  rate.  Every  car  shortage 
might  result  in  a  serious  delay  and  possible 
cancellation  of  contracts. 

To  insure  certainty  in  deliveries,  there- 
fore,  the  specialist  recommended   that   the 


[2Sl 


LEHIGH    AND    NEW    ENGLAND    RAILROAD    CO. 


management  pay  fifteen  hundred  dollars  for 
three  acres  at  the  junction  and  erect  its 
plant  there,  preferring  to  pay  freight  on  the 
raw  material  rather  than  save  at  the  possible 
expense  of  sales.  Some  weight  was  also 
attached  to  proximity  to  the  village;  work- 
men would  have  a  mile  less  to  walk  morn- 
ings and  evenings  and  could  go  home  to  their 
noonday  meals. 

The  decisive  factor,  however,  was  trans- 
portation facilities  and  service  in  this  in- 
stance, just  as  the  lower  cost  of  shorter  hauls 
had  been  the  determining  cause  in  locating 
the  plant  in  its  geographical  relation  to  the 
market. 

It  will  be  readily  seen  that  the  vast  amount 
of  research  and  investigation  necessary  to 
properly  select  a  site  for  any  industry 
involves  the  extensive  collection  of  data  for 
which  the  average  manufacturer  has  neither 
the  time  nor  the  facilities  to  obtain. 

Here  is  where  the  location  specialist  mate- 
rially assists  the  manufacturer  in  attending  to 
all  the  detail  work  and  submitting  his 
findings  in  the  form  of  a  report  to  his 
principal. 

[26] 


FINDING   THE    FACTS 


These  reports  sometimes  contain  several 
hundred  pages  of  closely  typewritten  informa- 
tion that  fully  covers  every  phase  of  the 
question.  The  main  question  here  is  to 
select  a  specialist  of  known  and  reliable 
ability,  whose  data  and  suggestions  can  be 
relied  upon  as  accurate  and  practical. 

The  manufacturer  or  organizer  who  tries 
to  attend  to  this  problem  himself,  without 
any  special  and  extended  experience  in  this 
work,  is  likely  to  overlook  any  one  of  the 
many  hundred  points  that  must  be  consid- 
ered, and  that  one  point  may  be  the  cause  of 
his  ultimate  failure.  The  best  results  in  any 
line  of  endeavor  are  always  obtained  by 
retaining  a  specialist  for  a  special  job. 
Therefore,  insurance  against  costly  mistakes 
and  assurance  of  business  success  are  obtained 
by  the  foresight  of  securing  the  services  of  a 
specialist  in  location  when  contemplating  the 
erection  of  a  new  plant. 


[^7] 


SOURCES  OF  INFORMATION 


"It  is  the  spirit  of  rivalry  that  sharpens  a  man's 
intellect  and  spurs  his  energy.  And  unless  a  man 
is  possessed  of  a  desire  to  overcome,  to  surpass,  to 
stand  first  in  his  line,  he  can  never  hope  to  carry 
the  day. 

"The  enterprising  business  man  is  eager  for  the 
struggle  of  competition.  He  likes  the  excitement 
of  contending  for  supremacy.  He  delights  to  over- 
come those  who  oppose  him  and  he  finds  genuine 
pleasure  in  outwitting  his  rivals." 

— ^Walter  H.  Cottingham 


THE  three  main  sources  of  informa- 
tion open  for  the  manufacturer 
contemplating  the  erection  of  a  new 
plant  are,  (i)  Independent  or  Free  Lance 
Specialists  or  Industrial  Engineers;  (2) 
Boards  of  Trade  or  Chambers  of  Commerce; 
(3)  the  Industrial  Research  Departments  of 
the  railroads. 

Independent  industrial  engineers  usually- 
work  upon  a  stipulated  fee.  Their  success  in 
the  past  has  been  notable  in  reducing  oper- 
ating costs  and  increasing  production.    The 

[28] 


FINDING   THE    FACTS 


industrial  engineer  is  primarily  an  efficiency 
man,  his  major  study  being  the  layout  and 
equipment  of  the  plant,  but  of  late  many 
noted  time  and  motion-study  specialists  have 
extended  their  knowledge  to  include  the 
organizing,  financing,  locating,  building,  man- 
agement and  distributing  details  of  a  new 
enterprise.  The  selection  of  a  capable  indus- 
trial engineer  with  a  record  of  past  successful 
performances  is  considered  among  industrial 
leaders  as  entirely  in  accord  with  good 
business  practice,  knowing  from  experience 
that  the  cost  of  retaining  them  is  really  an 
economical  expenditure  as  contrasted  to  the 
enormous  annual  losses  incurred  by  the 
manufacturers  who  still  persist  in  deter- 
mining such  vital  questions  by  rule-of-thumb, 
chance  or  guess-work. 

One  of  the  main  reasons  that  the  ordinary 
hard-headed,  competent  business  man  who 
employs  experts  in  many  different  lines  in 
his  business  will  neglect  to  profit  by  the 
employment  of  a  location  specialist,  is  that 
the  personal  equation  of  convenience  and 
sentiment  are  hard  to  overcome. 

One  of  the  notable  large  factories  of  the 


[29I 


LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO. 


United  States  supplies  a  case  in  point.  In 
plan,  arrangement,  equipment  and  working 
conditions  this  plant  could  hardly  be  improved 
upon.  It  employs  several  thousand  men  and 
consumes  merchant  steel  and  iron,  lumber, 
coal  and  many  other  supplies  by  the  train 
load.  For  many  years  this  great  bulk  of 
materials  had  to  be  trucked  nearly  two 
miles  from  the  city  freight  yards  to  the  factory 
and  the  product  in  turn  hauled  back  to  the 
freight  houses  for  shipment. 

Recently,  after  a  long  campaign  for  an 
enabling  ordinance,  the  company  secured 
direct  railroad  connections  which  allow  deliv- 
ery of  its  heavier  materials  in  the  factory 
yards.  But  it  is  still  obliged  to  maintain  a 
fleet  of  nearly  forty  motor  trucks  to  supple- 
ment the  limited  railroad  service  which  its 
isolated  situation  permits. 

Going  back  to  the  origin  of  the  plant  it 
was  found  that  the  personal  equation  entered 
largely  into  its  location.  Outgrowing  his  first 
small  shop,  the  owner — whose  commercial 
foresight  in  many  other  respects  has  been 
remarkable — permitted  sentiment  and  con- 
venience to  guide  his  selection  of  a  new  site. 

I  30] 


FINDING   THE    FACTS 


The  second  factory  was  erected  on  his 
father's  farm,  remote  from  the  railroads  and 
because  of  its  topographical  surroundings, 
difficult  to  reach  with  a  connecting  line. 
Possession  of  the  land  was  one  reason  for 
this  choice,  but  family  pride  and  fondness  for 
the  neighborhood  were  admittedly  the  com- 
pelling motives.  Thirty  years  ago,  of  course,  a 
switch  track  was  not  considered  essential  to  a 
factory,  while  the  most  active  imagination 
might  have  failed  to  conceive  the  need,  in 
time,  of  forty  motor  trucks  as  traffic  attend- 
ants on  the  little  new  plant  in  the  cornfield. 

Another  similar  instance  is  that  of  the 
Dent  Hardware  Company  of  Fullerton,  Pa., 
which  started  in  a  small  way  on  land  fur- 
nished by  one  of  the  partners.  The  factory 
gradually  grew  until  now  it  covers  several 
acres,  but  all  of  its  freight  must  be  handled 
by  motor  truck  owing  to  the  fact  that  no 
railroad  can  be  built  near  the  plant  on 
account  of  excessive  grades. 

Convenience  and  sentiment  still  control 
in  the  placing  of  countless  industries.  In 
starting  a  business  a  man  ordinarily  selects 
his  home  town  for  his  headquarters.    From 

[31I 


LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO. 

a  viewpoint  of  finance,  his  first  market  and 
the  labor  supply,  choice  of  the  city  in  which 
he  is  known  and  commands  friendly  interest 
is,  perhaps,  the  part  of  wisdom.  Under 
certain  conditions — limited  capital,  for  in- 
stance— any  other  action  might  be  impossi- 
ble. But  here  the  personal  equation  would 
not  actually  influence  the  decision.  Con- 
venience and  sentiment,  indeed,  have  much 
to  do  with  the  location  of  plants  in  partic- 
ular sections  of  the  city  which  the  owners 
may  prefer  because  they  are  easy  to  reach 
from  their  residences  or  because  they  want 
to  be  associated  in  the  public  mind  with  the 
district  chosen.  To  indulge  such  groundless 
preferences  is  to  handicap  the  success  of  the 
undertaking,  just  as  a  mistaken  loyalty  to 
his  native  town  or  a  desire  to  live  in  a  certain 
city  blinds  many  a  capable  business  man 
to  the  advantages  of  other  more  strategetic 
centers. 

BOARDS  OF  TRADE 

Many  towns  have  Boards  of  Trade  or 
Chambers  of  Commerce  who  appoint  com- 
mittees whose  work  is  to  advertise  the  advan- 


FINDING   THE    FACTS 


tages  of  their  particular  localities.  The 
committees  keep  informed  of  new  projects 
proposed  by  various  outside  concerns  and 
they  endeavor  to  secure  the  interest  of  the 
promoters  by  presenting  to  them  the  advan- 
tages of  their  town..  At  the  same  time  these 
Boards  of  Trade  workers  endeavor  to  secure 
the  active  co-operation  of  the  citizens  by 
having  them  contribute  money  for  the  pur- 
pose of  investing  in  factory  sites  which  will 
be  at  the  disposal  of  the  Board  of  Trade,  to 
give  to  companies  that  are  looking  for  a 
factory  location. 

Sometimes  promoters  can  interest  citi- 
zens to  collect  sufficient  funds  to  purchase 
a  site  for  their  enterprise.  Of  course,  the 
citizens  who  will  be  interested  in  securing 
a  factory  site  and  are  willing  to  contribute 
will  be  the  ones  most  likely  to  form  the 
membership  of  the  local  Board  of  Trade. 
However,  this  is  not  always  the  case.  The 
difference  between  the  Board  of  Trade's 
action  and  the  citizens'  action  is  that  one 
is  a  systematic  endeavor  and  the  other 
is  an  occasional  one.  In  some  cases  the 
town  itself  may  appropriate  money  to  secure 


[33  1 


LEHIGH   AND    NEW    ENGLAND    RAILROAD   CO. 

factory  sites.  In  other  instances,  a  private 
citizen  may  give  a  piece  of  land  for  the  same 
purpose.  It  is  far  more  common,  however,  for 
the  land  to  be  contributed  by  the  Board  of 
Trade  or  the  citizens  acting  as  a  body  on 
some  special  occasion. 

Some  years  back  it  was  not  uncommon 
for  the  Boards  of  Trade  and  other  organi- 
zations to  encourage  the  location  of  factories 
by  providing  buildings.  This  building  might 
be  given  outright  to  the  factory  owners, 
but  more  usually  the  arrangements  were  as 
follows:  The  townspeople  were  informed 
what  type  of  building  was  desired  and  they 
would  erect  the  structure  according  to  the 
specifications  and  then  lease  the  building  to 
the  promoters  of  the  enterprise  for  a  sum  of 
money  which  might  or  might  not  be  nominal. 
It,  at  any  rate,  would  be  comparatively  low. 
At  the  termination  of  the  lease  the  factory 
managers  then  had  the  option  of  buying  the 
building  for  a  fixed  sum  provided  for  in  the 
contract,  and  usually  they  willingly  paid  this 
amount. 

Sometimes  the  citizens  in  a  community 
are  not  only  anxious  to  have  various  kinds  of 

[34] 


FINDING   THE    FACTS 


factories  locate  within  their  borders,  but 
are  willing  and  even  desire  to  invest  in  a  pro- 
posed scheme  if  the  promoters  will  locate  in 
their  vicinity.  Frequent  instances  are  on 
record  in  which  some  enterprising  individual 
has  enlisted  the  support  of  a  community  and 
put  up  a  plant  with  the  money  supplied  either 
wholly  or  in  part  by  the  residents. 

The  residents  may  make  various  other 
kinds  of  agreements  with  the  promoters. 
In  some  cases  the  promoter  becomes  merely 
the  managing  employee  of  the  concern,  being 
remunerated  by  regular  salary.  In  some 
cases,  if  the  plant  is  a  success,  he  is  given, 
at  the  end  of  a  certain  time,  a  percentage  of 
the  capital  stock  by  vote  of  the  board  of 
directors.  At  other  times  the  inhabitants 
subscribe  to  the  stock  and  become  stock- 
holders in  the  firm,  but  do  not  have  sufficient 
control  of  the  enterprise  to  have  more  than 
one  or  two  representatives  of  the  citizens  on 
the  board  of  directors. 

Other  inducements  are  sometimes  granted 
such  as  free  gas  or  free  power  for  a  limited 
period  of  time.  One  town  put  a  fire  fighting 
system  into  a  plant  as  one  of  its  inducements. 


[35] 


LEHIGH   AND    NEW    ENGLAND    RAILROAD   CO. 

The  citizens  of  another  town  built  a  belt  line 
connecting  competing  railroads  and  are  offer- 
ing factory  sites  at  a  very  moderate  cost  along 
the  belt  line.  There  are  numerous  other 
inducements  of  a  minor  nature,  all  of  which 
are  given  to  secure  an  industrial  population. 
In  some  aggressive  cities  the  Boards  of 
Trade  have  formed  the  policy  of  aiding  new 
concerns  by  means  of  specially  organized 
fostering  corporations  which  do  not  aim  at 
private  profit,  but  at  a  general  upbuilding 
of  the  neighborhood.  In  one  location,  effort 
may  take  the  form  of  a  Loan  Corporation 
organized  by  citizens  with  the  object  of 
loaning  funds  to  a  new  enterprise  that  is 
approved  by  the  local  commercial  organi- 
zation, sufficient  interest  being  charged  to 
pay  expenses  and  even,  perhaps,  a  small 
dividend.  In  another  place  the  enterprise 
may  be  a  Holding  Company  which  will 
invest  not  over  a  given  maximum  sum  in  the 
bonds  or  stocks  of  an  approved  new  concern. 
Still  another  form  of  fostering  corporation 
is  a  Real  Estate  Development  Company 
which  stands  ready  to  purchase  a  site  and 
build  structures  for  parties  approved  by  the 

[36] 


FINDING   THE    FACTS 


commercial  association,  either  renting  the 
properties  or  selling  them  on  easy  payments. 

Several  cities  have  been  helping  new  con- 
cerns by  means  of  a  credit  guarantee  fund 
established  by  the  subscriptions  of  citizens. 
Under  this  plan  no  money  is  called  for.  The 
subscriptions  are  simply  guarantees.  The 
subscribers  appoint  trustees  or  attorneys-in- 
fact  to  represent  them,  empowering  them  to 
obligate  them  to  the  extent  of  their  subscrip- 
tions. 

An  applicant  deals  with  an  investigating 
committee  of  the  local  commercial  associ- 
ation. If  his  report  is  favorable,  the  com- 
mittee recommends  to  the  trustees  a  definite 
loan  of  credit.  Should  the  trustees  approve, 
the  borrower  makes  out  his  notes,  receives 
the  endorsement  of  the  trustees  upon  them 
and  on  this  collateral  secures  a  loan  from  a 
designated  bank.  Interest  is  charged,  and 
the  rate  may  even  be  fixed  one  or  two 
percent  above  the  current  rate  to  cover 
costs  and  provide  a  contingent  fund.  The 
periods  of  the  loans  may  range  from  five  to 
ten  years.  In  case  the  loans  are  paid,  the 
subscribers  to  the  fund  are  not  called  upon. 

[37] 


LEHIGH   AND   NEW    ENGLAND    RAILROAD   CO. 

But  if  there  is  default,  the  subscribers  must 
pay  pro  rata  according  to  the  amount  of 
their  subscription.  Subscriptions  for  this 
purpose  are  for  a  definite  period.  Copies 
of  the  subscription,  of  the  power  of  attorney, 
and  of  the  essential  contracts  must  be  filed 
with  each  bank  making  the  loans.  The 
plan  is  intended  to  aid  only  in  the  initial 
financing  of  young  concerns.  With  various 
modifications  of  detail  this  idea  has  been 
used  at  Worcester,  Mass.,  Williamsport,  Pa., 
Jackson,  Mich.,  and  Peoria,  111. 

Mr.  W.  S.  Milliner,  Secretary-Manager  of 
the  Williamsport  Board  of  Trade,  in  1914 
said  that  after  a  period  of  fourteen  years  that 
the  guarantee  plan  was  in  force,  it  has  been 
abandoned.  The  management  of  the  fund 
was  very  conservative,  the  attorneys-in-fact 
taking  mortgages  upon  some  property  of  the 
borrower  whenever  endorsing  notes.  The 
losses  were  so  small  that  they  were,  in  each 
case,  met  by  the  directors  of  the  Board  of 
Trade  and  by  prominent  men  or  wealthy 
citizens,  so  that  a  general  assessment  on  the 
guarantors  was  never  made.  In  practice, 
it  was  found  that  the  credit  of  a  borrowing 

[38] 


FINDING   THE    FACTS 


concern  was  materially  injured,  so  much  so 
that  it  was  difficult  for  that  concern  to  secure 
further  accommodations  except  with  the 
same  kind  of  security. 

It  is  the  judgment  of  those  connected 
with  the  plan  in  Williamsport  that  the  chief 
advantages  resulting  from  it  were  the  atten- 
tion attracted  to  the  city,  and  the  inquiries 
brought  from  industries  seeking  a  new  loca- 
tion, rather  than  anything  which  resulted 
from  the  actual  operation  of  the  plan  after 
the  industries  had  been  attracted.  "It  is 
doubtful,''  said  Mr.  Milliner,  *'if  any  plan 
of  this  sort,  or  any  modification  of  it,  will 
secure  for  a  city,  industries  which  are  really 
worth  while  that  could  not  be  secured  through 
established  and  liberal  banking  circles 
together  with  the  aid  of  public  spirited  citi- 
zens able  to  become  investors  in  a  worthy 
industry." 

THE  RAILROADS 

Arthur  W.  Thompson,  formerly  Vice-presi- 
dent of  the  Baltimore  and  Ohio  Railroad 
Company  said  that  the  railways  are  necessa- 
rily interested  in  the  development  of  industry 


[39 


LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO, 

and  commerce  since  their  prosperity  depends 
largely  upon  the  prosperity  of  those  whom 
they  serve. 

Years  ago  the  railroads  started  a  campaign 
for  the  agricultural  development  of  their 
territories.  Many  of  the  railways  had 
special  agricultural  departments  connected 
with  their  development  departments.  In 
co-operation  with  the  Federal  and  State 
officials,  the  railways  endeavored  to  encour- 
age a  better  quality  and  a  larger  quantity  of 
farm  products,  and  to  secure  improvement  of 
the  soil. 

The  success  of  this  department  prompted 
the  railways  to  broaden  the  scope  of  their 
efforts  and  to  include  the  development  of 
the  natural  resources  and  the  location  of 
industries.  Through  a  systematic  study  of 
its  business  the  railways  first  determined 
where  all  their  business  came  from  and 
where  it  all  went.  Through  such  studies 
the  railroads  determined  a  course  of  action 
looking  to  a  fuller  use  of  its  equipment, 
that  is,  keeping  its  cars  moving  under  the 
fullest  practicable  loads  the  greatest  part  of 
the  time.    Generally,  of  the  railroads  of  the 

[40] 


FINDING   THE    FACTS 


United  States,  about  thirty-five  percent  of 
the  freight  car  miles  are  empty. 

By  a  knowledge  of  the  markets  and  manu- 
facturing conditions,  it  was  thought  business 
could  be  developed  for  the  railroads  in  the 
empty  car  direction.  The  knowledge 
obtained  by  one  railway  system  of  its  territory 
was  exchanged  with  the  other  lines  and  in 
that  way  the  development  departments 
of  the  roads  obtained  the  most  accurate 
and  concrete  data  that  could  be  used  in 
comparison  of  different  sections  of  the 
country. 

To  assist  the  manufacturer  in  making  the 
essential  studies  of  the  different  sections  in 
which  he  contemplated  locating  an  industry, 
the  railroads  employed  a  large  corps  of 
engineering  and  industrial  experts,  the  best 
that  could  be  obtained,  and  placed  them  at 
the  manufacturer's  service.  These  men  are 
constantly  engaged  in  making  economic, 
geological,  chemical,  agricultural,  engineering 
and  other  surveys  relative  to  the  suitability 
of  localities  for  manufacturing  operations  of 
all  kinds. 

Hugo  Diemer,  Consulting  Engineer,  said: 

[41] 


LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO. 


"There  are  no  people  in  a  better  position  to 
make  a  careful  study  of  the  conditions 
governing  industrial  location  than  railway 
officials.  The  industrial  agents  of  railroads 
are  continually  gathering  and  systematizing 
data  regarding  favorable  sites  for  prospective 
industries.  The  pursuit  of  such  studies  and 
the  exercise  of  sound  judgment  consequent 
upon  them  requires  a  knowledge  of  manu- 
facturing processes  and  industrial  economies, 
in  addition  to  ability  of  a  high  order.  Their 
opinion,  on  every  inquiry  received  from 
manufacturers,  is  given  absolutely  unbiased 
and  impartial  of  the  road  that  employs 
them.  Their  report  is  based  upon  their 
specialized  knowledge  of  conditions  in  every 
part  of  the  country.'' 

If  the  various  territories  and  industrial 
centers  are  to  be  prosperous  it  is  essential 
that  their  industries  be  economically  adapted 
to  local  conditions.  If  they  are  not  so 
adapted,  they  will  be  unable  to  stand  the 
strain  of  competition  when  the  lean  years 
come.  The  railways  and  the  communities, 
by  co-operating,  can  render  such  service  to 
the  country  that  the  economic  slack  will  be 

[42] 


FINDING   THE    FACTS 


taken  up  and  society  made  richer  in  goods 
and  experience. 

To  sum  up,  the  promoter,  organizer,  manu- 
facturer or  corporation  seeking  to  establish 
a  new  industry,  or  to  extend  its  present 
business  by  establishing  branch  plants,  or  to 
remove  from  the  disadvantages  of  an  unprof- 
itable site,  should  by  all  means  secure  the 
advantage  of  these  known  sources  of  know- 
ledge and  assistance  that  are  open  to  them. 

In  selecting  the  section  of  the  country, 
and  the  exact  site  within  that  section, 
decision  should  be  based  wpon  facts  so  that 
that  plant  will  be  so  situated  that  the  factors 
of  raw  material,  transportation,  labor,  power 
and  markets,  etc.,  will  be  in  its  favor, 
thereby  enabling  the  enterprise  to  benefit 
by  reducing  production  and  distributing 
costs  and  enjoy  a  greater  volume  of  business 
and  larger  profits. 


[43: 


THE  INDUSTRIAL  SERVICE 

OF  THE 

LEHIGH  AND  NEW  ENGLAND 
RAILROAD 


A  S  pointed  out  in  the  opening  chap- 
/%  ters  of  this  book,  the  selection  of 
^  JL  a  site  for  a  manufacturing  or  dis- 
tributing plant  need  no  longer  be  left  to 
guess-work  or  unsupported  personal  opinions. 
The  fundamental  principles  that  must  be 
observed  to  prevent  costly  errors  have  been 
coded,  and  skilled  specialists  are  available  to 
apply  these  principles  scientifically  to  each 
individual  "location"  problem. 

There  is  no  mystery  or  Black  Magic  in 
the  method  used  by  these  specialists.  Just 
as  the  chemist  predicts  reactions  and  obtains 
them — as  the  mining  engineer  assays  a  situ- 
ation and  determines  the  value  of  the  ore — 
so  the  ''industrial  specialist''  assays  a  situ- 
ation and  predicts  with  surprising  accuracy 
the  success  or  failure  of  any  specified  site 

[44I 


FINDING   THE    FACTS 


as  a  location  foi"  the  plant  of  a  particular 
manufacturer. 

He  plans  with  the  same  certainty  of  results 
that  the  naval  engineer  plans  a  Mauretania, 
the  bridge  engineer  a  Brooklyn  Bridge,  the 
modern  architect  a  Woolworth  building.  He 
does  this  largely  because  he  knows  what 
facts  to  look  for  and  where  to  look  for  them. 
And  his  success  rests,  in  no  small  measure, 
on  the  fact  that  he  weighs  all  the  factors  in 
the  case  without  bias  of  any  sort. 

Many  large  corporations  have  the  conclu- 
sions of  their  own  staff  checked  by  several 
outside  specialists  when  planning  an  impor- 
tant move  of  this  character.  Obviously  the 
broadest  outside  viewpoint  is  valuable  and 
every  help  is  well  worth  considering  if  it  shows 
promise  of  bringing  new  facts  and  figures 
that  bear  directly  on  the  problem. 

Whether  you  maintain  an  industrial  inves- 
tigation staff  of  your  own,  or  are  making 
investigations  under  the  guidance  of  an 
outside  organization  of  specialists,  you  will 
find  the  Industrial  Service  Department  of 
the  Lehigh  &  New  England  Railroad  a 
valuable  aid  in  checking  conclusions. 

[  45  ] 


LEHIGH   AND    NEW    ENGLAND    RAILROAD   CO. 

The  reports  of  this  department  are  com- 
piled with  great  care  and  study.  The  men 
who  co-operate  in  making  them  have  had 
wide  experience  in  this  specialized  work. 
Their  knowledge  of  the  vital  factors  of 
transportation  and  distribution  is  unusual, 
while  the  policy  of  free  exchange  of  informa- 
tion and  data  among  railroads  enables  them 
to  readily  procure  facts  and  figures  that 
most  independent  specialists  and  local  organi- 
zations would  find  it  almost  impossible  to 
gather. 

The  services  of  this  department  are 
given  entirely  without  charge  or  obligation. 
Obviously  our  desire  is  to  draw  along  the 
lines  of  the  Lehigh  &  New  England  Railroad 
only  manufacturing  and  distributing  plants 
that  will  grow  and  prosper  best  in  that  particu- 
lar locality.  Only  prosperous  concerns  provide 
the  steady  flow  of  freight  which  a  railroad 
seeks.  It  is  clear,  therefore,  that  recom- 
mendations made  by  the  Lehigh  &  New 
England  Railroad  Industrial  Service  staff 
men  are  free  from  bias.  They  provide  impar- 
tial comparisons  of  the  different  sections  of 
the  country  a  manufacturer  may  have  in 

[46I 


FINDING   THE    FACTS 


mind  that  he  can  use  with  assurance  and 
safety  in  making  his  final  decision. 

The  Lehigh  &  New  England  Railroad 
Company  realizes  that  it  would  be  a  short- 
sighted policy  to  induce  an  industry  to 
locate  where  it  would  not  prosper.  Looking 
into  the  future  requires  advice  on  sound, 
logical  deductions  of  an  impartial  nature  in 
order  to  have  industries  grouped  along  the 
Company's  lines  that  are  assured  of  success. 

The  staff  of  the  Lehigh  &  New  England 
Railroad  Company  works  either  independ- 
ently or  in  co-operation  with  local  Boards 
of  Trade,  Independent  Specialists  or  the 
corporation's  own  industrial  location  staff. 
It  is  believed  that  the  Lehigh  &  New  England 
Railroad  Company's  staff,  with  its  sources 
of  information  and  ramifications  through 
which  it  can  obtain  knowledge  of  different 
kinds  in  relation  to  freight,  materials,  mar- 
kets, labor,  etc.  will  be  able  to  furnish  help 
of  distinct  and  definite  value  under  any 
circumstances. 

We  find,  as  a  great  rule,  that  when  the 
average  manufacturer  gets  in  touch  with  our 
staff  he  is  much  perplexed,  as  he  has  tapped 

[47] 


LEHIGH  AND   NEW   ENGLAND   RAILROAD   CX). 


many  sources  of  information  and  gathered 
much  information  that  seems  to  conflict. 
In  such  cases  the  advice  of  the  Lehigh  & 
New  England  Railroad  staff  (given  in  the 
form  of  a  clear,  typewritten  report)  does 
much  to  clarify  the  situation. 

Traffic  Department 

LEHIGH  AND  NEW  ENGLAND 

RAILROAD  COMPANY 

GENERAL  OFFICES 
BETHLEHEM,  PENNSYLVANIA 


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